DOES WHAT COUNTRIES EXPORT MATTER? THE ASIAN AND LATIN AMERICAN EXPERIENCE

The present paper examines the differences in growth performances of Asia and Latin America, in particular, the roles of trade and institutions in explaining the differential growth experiences of the two regions. In examining trade policy instruments as a plausible explanation of growth divergence, we have focused on the emerging pattern and composition of export baskets in the two regions and regional integration and accession to WTO. In a GMM dynamic panel estimation for the period 1975-2005, though it is found that diversification and composition of exports have significant impacts on economic growth in both the regions, diversification within the manufacturing sector is important for Asia only. The common determinants of growth in the two regions are exports, investment, public debt and human capital. On the other hand, the differentiating factors on the diverging growth experiences of Asia and Latin America are infrastructure, regional integration and institutional aspects like patent protection, and WTO.